Andalas Energy and Power Plc - New IPP Project, Gas Sales MOU and Joint Venture

PR Newswire

London, November 26

Andalas Energy and Power Plc

(‘Andalas’, or the ‘Company’)

New IPP Project, Gas Sales MOU and Joint Venture

Andalas Energy and Power plc (AIM:ADL) is pleased to announce that it has signed a gas sales memorandum of understanding (“Gas Sales MOU”), with a private Indonesian company, for the supply of gas to a new independent power project (“Sumatra-1”) and commenced discussions with the Indonesian national power company, PLN, regarding procurement of the generating capacity.  Sumatra-1 will be co-developed with PT Sinar Era Gemilang (“SEG”) in accordance with a newly signed joint venture agreement with SEG for the development of independent power producer (“IPP”) projects in Indonesia.  

Andalas and SEG have undertaken preliminary grid stability and demand studies for a 40MW IPP at Sumatra-1.  After preliminary discussions with PLN, Andalas and SEG have agreed to prepare and submit a written proposal requesting PLN commence procurement of the generating capacity which would include negotiation of a power purchase agreement.  The terms of the proposal will be refined after further discussions with PLN.

Simon Gorringe, CEO of Andalas Energy & Power, commented, “The Sumatra-1 IPP represents further solid progress. It not only develops and strengthens our project portfolio of IPPs but also diversifies operational and counter party risk, being our first non-Pertamina project. It also underlines the potential for IPP projects in Sumatra, where there are available gas resources, experienced development partners, accessible grid infrastructure and power demand. 

“Our joint venture with SEG will bring significant benefits to both parties.  SEG’s understanding of the power market combined with our understanding of the gas market enhances our ability to identify and secure further power projects and we expect it will reduce third party development costs.  We expect the joint venture to be a nimble decision maker able to deliver outcomes against short timetables.” 

Sumatra-1 Project & Gas Sales MOU Details

SEG Joint Venture Details

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR’).  Upon the publication of this announcement via a Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

For further information, please contact:

David Whitby Andalas Energy and Power Plc Tel:  +62 21 2783 2316
Sarah Wharry
 
Cantor Fitzgerald Europe
(Nominated Adviser and Joint Broker)
Tel: +44 20 7894 7000
Jon Belliss Beaufort Securities Limited
(Joint Broker)
Tel: +44 20 7382 8415

**ENDS**

Glossary:

IPP                   independent power producer

MMscfd             million standard cubic feet per day

Pertamina         PT Pertamina (Persero)

PLN                  PT PLN (Persero)

RUPTL              Rencana Usaha Penyediaan Tenaga Listrik is Indonesia’s electricity business plan.  It contains demand forecasts, future expansion plans, electricity production forecasts, fuel requirements and indicates which projects are planned to be developed by PLN and independent power project investors.